Bids begin for Tully Sugar

Three companies are bidding to take over Tully Sugar Limited after shareholders voted overwhelmingly to lift a ban restricting ownership of shares.

Chinese-owned COFCO and international agribusiness company Bunge tabled takeover bids at yesterday's shareholder meeting and Mackay Sugar has placed a bid as well.

Bunge has already lifted its offer for shares by $1 to $42, valuing Tully Sugar around $130 million.

Tully Sugar general manager John King says most shareholders voted in favour of the new arrangement.

"There's people who see a long-term opportunity to expand their cane growing opportunities, so while they may be selling their shares in the company, they're actually looking at how they're going to expand their farming operations into the future, so I think there is a win-win situation there for some people," he said.

"Mackay will continue to go about putting in our best position," he said.

"We are offering not only price, we're also offering long-term sure bet for north Queensland cane farmers.

"We will get our bid on the table and then we will review the position."

Paul Schembri from sugar lobby group Canegrowers says he hopes Mackay Sugar's bid is seen as the best option by shareholders.

"We have seen in the last six months, 60 per cent of Australia's sugar milling assets fall into foreign hands, so we think that the creation here, potentially, of a large-scale, grower-controlled and Australian-owned milling company is [something] that growers would support," he said.

He says the deal must be financially viable for growers.

"At the end of the day, the proposal will need to add value the businesses of cane farmers," he said.

"We've been through a terrible patch in the last 12 or 13 years and certainly we would be looking to this sort of proposal to add value to our business."